Linked yesterday on the Drudge Report and picked up by news outlets all over the world is a brief Bloomberg report on a statement from the Italian Finance Minister Giulio Tremonti. Tremonti attributed to Pope Benedict XVI a “prophecy” dating from over twenty years ago concerning the current global financial meltdown.

Again, the story is quite brief, and here’s the gist:

“The prediction that an undisciplined economy would collapse by its own rules can be found” in an article written by Cardinal Joseph Ratzinger, who became pope in April 2005, Tremonti said yesterday at Milan’s Cattolica University.

But if you want the original context of then-Cardinal Ratzinger’s statements, avail yourself of the only readily-accessible English translation of the article cited by Tremonti: “Market economy and ethics,” given by Ratzinger in in 1985 at a symposium in Rome, “Church and Economy in Dialogue.”

It is becoming an increasingly obvious fact of economic history that the development of economic systems which concentrate on the common good depends on a determinate ethical system, which in turn can be born and sustained only by strong religious convictions. Conversely, it has also become obvious that the decline of such discipline can actually cause the laws of the market to collapse. An economic policy that is ordered not only to the good of the group — indeed, not only to the common good of a determinate state — but to the common good of the family of man demands a maximum of ethical discipline and thus a maximum of religious strength.

As you can see from this quote and the context of the larger paper, the import of Ratzinger’s warning is not simply about an “undisciplined economy,” but more specifically about an economy that lacks participants who act from the basis of a serious and committed moral foundation, one that is “sustained only by strong religious convictions.” It’s about a lack of religious discipline as much as economic discipline.

Reading Tremonti’s quote as it appears in the Bloomberg article (which admittedly might be quite different in its own original context) might lead one to think that Ratzinger was simply talking about the lack of material discipline, for which the “new frugality” would be an adequate cure. But as Ratzinger rightly observed then, the causes of poverty and economic distress are not simply material, but also spiritual.